Albuquerque city councilors will soon decide the fate of two proposals Mayor Tim Keller’s administration says will help revitalize Downtown.
After two years in the works, two tax increment financing (TIF) proposals for Downtown are expected to be on the City Council’s Dec. 16 meeting agenda. If passed by the council, the proposals would allow the Metropolitan Redevelopment Agency (MRA) to implement a property tax-based TIF and a gross receipts tax-based TIF.
Tax increment financing is a method that takes a portion of either property or gross receipts taxes and uses them toward improvement projects in a certain area.
According to MRA Director Terry Brunner, as property taxes and gross receipts tax naturally increase over time, the MRA would take 75% of that financial growth and reinvest it in Downtown over the course of 20 years.
Read more about tax increment financing and Brunner answering criticism about it increasing taxes for business owners here.
While the proposed initiatives are not up for discussion until later this month, some councilors raised questions about them during their Dec. 2 meeting. Councilor Renée Grout asked Brunner how much money Downtown might see from tax increment financing.
Brunner told the council he couldn’t give an exact number without a property tax assessment and that gross receipts taxes “could be all over the map.”
“We have a very preliminary analysis that the property tax over the course of a year, assuming a very low growth rate, would be maybe $20,000,” Brunner said.
Brunner said tax increment financing funds are traditionally used on public infrastructure, commercial development incentives or grant programs and over the next year, the MRA will try to “figure out how we would structure a TIF program.”
“In the first few years of the TIF, you’re not going to see much revenue,” Brunner said. “You won’t see much expenditure because you’re waiting for that amount to go up. You won’t see a $10 million loan program or a very large loan guarantee program or a large grant program. We will probably start with smaller efforts.”
After hearing about the TIF process, Councilor Brook Bassan asked if other cities go through the same process because she said sounded like “there’re so many unknowns with the promise of a potential outcome that’s beneficial.”
According to Brunner, Albuquerque is “very late to the game in the world of tax increment financing,” because it was approved for the city 20 years ago but was never implemented. He said each city can have different processes, which helps the MRA know what to follow or avoid.
“We have a lot to learn from,” Brunner said. “I think that, in a sense, helps us because we can learn from mistakes…and hopefully design something different here that’s more effective, and meets the community where they’re at.”
According to Brunner, the MRA has been working with the county assessor and if the property tax-based TIF proposal is passed by the council, it could be implemented starting early 2025. If the gross receipts tax-based TIF proposal is passed by the council, the state’s Board of Finance will review the application in March and vote whether or not to approve it.
HOW TO PARTICIPATE:
WHEN: 5 p.m. Dec. 16
WHERE: Vincent E. Griego Chambers in the Albuquerque Government Center, 1 Civic Plaza NW
VIRTUAL: GOV-TV or on the city’s YouTube channel